Cockrell v. McKenna

• Decision Date: 18 October 1926
• Docket Number: No. 123.,123.
• Citation: 134 A. 687
• Parties: COCKRELL v. McKENNA.
• Court: New Jersey Supreme Court

134 A. 687

COCKRELL

v. McKENNA.

No. 123.

Court of Errors and Appeals of New Jersey.

Oct. 18, 1926.

(Syllabus by the Court.)

Appeal from Circuit Court, Monmouth County.

Action by Helen E. Van Wagoner Cockrell against Sadie O'R. McKenna. From a judgment for plaintiff, defendant appeals. Reversed.

Perkins & Drewen, of Jersey City, for appellant.

William E. Foster, of New York City, for respondent.

HETFIELD, J. This appeal is from a judgment entered in the Monmouth county circuit court on the direction of a verdict for plaintiff. The action was founded upon a promissory note dated December 30, 1918, and made by the defendant, for the sum of $4,000, payable four months after date, to the order of Moncure Cockrell. The note was transferred on April 2, 1919, to the plaintiff, who at the time was engaged to the payee, and was later married to him on May 2, 1919. The defendant by her answer set up, among other things, that the plaintiff was not the holder of the said note in due course and for value, and that there was no consideration for the making of the note between the original parties thereto, in its inception.

The plaintiff, on being examined before trial, testified that she had become engaged to Moncure Cockrell, the transferor, on September 20, 1918, and that the note was transferred and delivered to her by her fiance, on Wall street, where they had met by appointment. When asked what were the circumstances under which the note was delivered at that place, she answered as follows:

"We are going to be married very shortly, and I met Mr. Cockrell, and he wanted to present me with a wedding gift, and he came along and said, 'Here's your wedding gift.'"

And, when questioned as to what she said when the note was received, she answered:

"I thanked him profusely. I was very glad to get it."

At the trial of the case the plaintiff was asked on cross-examination how she had come into possession of this note, and answered:

"Well, Mr. Cockrell and I had become engaffed, and I talked about an engagement ring, and I showed him the kind of ring I wanted; it was the kind my sister had, a very beautiful ring. He said he couldn't give it to me right then, but that he would get it, and all the time we were engaged my friends would ask me when I was going to get my ring, and I would tell them a little later; so finally, in talking it over with Mr. Cockrell, he said, T will give you a substantial gift until you get your ring.' So on the evening of April 2d Mr. Cockrell met me at 37 Wall street, and he took these papers out of his pocket and said, 'Here is your wedding gift;' and that is how I came into possession of the note."

The defendant at the trial offered to prove that there was a failure of consideration for the note between the original parties, and contended that such evidence was admissible on the ground that the plaintiff was not a holder in due course. The offer was overruled, and the trial court, when directing a verdict, stated:

"The presumption in this case is that Mrs. Cockrell is a holder in due course. The only testimony bearing upon that question is the testimony of the plaintiff herself as to the circumstances under which she secured possession of this note. * * * Under those circumstances, you have a situation where the plaintiff, under the law, is presumed to be the holder of this note in due course, and there is no evidence in the case to rebut the presumption that she was such holder in due course."

We think that the testimony of the plaintiff, both before and at the trial, was sufficient to destroy the existing presumption that she was a bona fide holder for value, and consequently did not hold the note free from equities between the original parties. The note in question was delivered and made payable in the state of New York, and the law of that state governs in this case. Section 91 of the Negotiable Instrument Act of New York (Consol. Laws, c. 38), which is identical with section 52 of the New Jersey statute (3 Comp. St. 1910, p. 3741), states that a holder in due course is a holder who has taken the instrument under the following conditions:

"1. That it is complete and regular upon its face. 2. That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact. 3. That he took it in good faith and for value. 4. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it."

It is apparent...